Weyco Group, Inc.

What they do

Weyco purchases finished shoes from more than 80 independent overseas suppliers, mainly in China and India, and sells them through two reportable North American segments: Wholesale and Retail. Wholesale sells to over 10,000 shoe, clothing, and department stores in the U.S. and Canada, and also includes worldwide licensing revenue, representing 78% of 2025 net sales. Retail consists of e-commerce businesses and four U.S. brick-and-mortar stores, at 13% of 2025 net sales. Florsheim Australia wholesale and retail operations in Australia and South Africa add the remaining 9%.

Revenue drivers

• North American Wholesale — Largest segment at 78% of 2025 net sales; sells Florsheim, Nunn Bush, Stacy Adams, and BOGS to footwear, department, and specialty stores plus licensing revenue. No individual customer reached 10% of total net sales in 2025 or 2024.
• Florsheim brand — Achieved record sales of $92.0 million in 2025, up 2% versus 2024, with growth in dress, hybrid, and casual categories; Q2 2026 wholesale Florsheim sales rose 12%.
• Nunn Bush and Stacy Adams — Nunn Bush declined 10% in 2025 and 3% in Q2 2026 amid pressure in mid-tier channels and private-label competition; Stacy Adams declined 9% in 2025 but rose 4% in Q2 2026.
• North American Retail and Florsheim Australia — Retail was 13% of 2025 net sales, driven by e-commerce (Q2 2026 sales $7.0 million, up 4%), while Florsheim Australia was 9% of 2025 net sales and posted Q2 2026 sales of $6.4 million.

Recent performance

Q2 2026 net sales were $62.2 million, up 7% from Q2 2025, with wholesale up 7% to $48.8 million, retail up 4% to $7.0 million, and Florsheim Australia up 10% to $6.4 million. Gross earnings were 70.4% of net sales, including $15.3 million of tariff refunds; operating earnings were $17.0 million and net earnings $13.3 million, or $1.39 per diluted share, versus $3.9 million and $2.3 million ($0.24) a year earlier. Full-year 2025 revenue was $276.2 million, down 5%, and net income was $23.1 million, or $2.41 per diluted share. Q2 2026 wholesale selling and administrative expenses rose to $18.1 million, or 37% of net sales, from $13.1 million, or 29%, mainly on higher employee costs. The quarter's results were heavily affected by the recognition of $15.3 million of tariff refunds and $0.7 million of interest income.

Strategy

Management is focused on growing e-commerce and has decided to close all four U.S. brick-and-mortar stores at the end of their lease terms, with the first closed at the end of June 2026 and the remaining three planned over the next seven months. The company is diversifying its manufacturing base to be less China-centric and is value-engineering Nunn Bush product to meet key price points against private-label competition. It implemented a 10% price increase in July 2025 and is pursuing a refund lawsuit for incremental IEEPA tariffs paid. Brand priorities include extending Florsheim into hybrid and dress sneaker categories and translating Stacy Adams dress shoe sell-through into casual lifestyle demand.

Risks

• Tariff and trade policy uncertainty — Weyco paid approximately $19.8 million in IEEPA tariffs across 2025 and Q1 2026, and after the February 2026 Supreme Court ruling a 10% tariff was imposed under separate authority and raised to 12.5% on China, Dominican Republic, and Vietnam on July 24, 2026.
• Foreign supplier dependence — All products are purchased from independent foreign manufacturers, primarily in China and India, with no long-term contracts and two China suppliers each exceeding 10% of 2025 inventory purchases.
• Brand and channel pressure — Nunn Bush declined 10% in 2025 amid soft mid-tier channels and private-label competition, and Stacy Adams declined 9% in 2025 on weak fashion dress shoe demand.
• Long production lead times and demand forecasting — Weyco typically forecasts demand at least five months in advance, so inaccurate forecasts can mean lost sales or excess inventory sold at discounted prices.

Outlook

Management said U.S. trade policies remain fluid and unpredictable, creating near-term gross margin uncertainty, though it has mitigation strategies and will adjust as needed. The company reported growth in three of its four major brands in Q2 2026, with wholesale up 7%, but described the environment for discretionary consumer goods including footwear as challenging. The remaining $1.2 million of tariff entries are now Phase 3 with no claim submission timeline, and no related refunds have been recognized. Weyco expects the Retail segment's results to continue to be driven by e-commerce as it closes its four U.S. stores.